The U.S. Securities and Exchange Commission (SEC) is investigating whether Binance’s BNB token was a security at the time of its sale in 2017. This was reported by Bloomberg, citing sources.
Binance Coin (BNB) was launched in July 2017. It was originally an ERC-20 token on the Ethereum blockchain. In April 2019, the asset migrated to its own blockchain.
During the ICO, 100 million BNB were sold at $0.15. Of the total issue of 200 million tokens, 10% went to business angels and 40% was reserved for the project’s founding team.
The white paper did not set limits on tokenseal participants. According to Bloomberg, the regulator knows at least one U.S. citizen who bought BNB in the initial sale. This allows the SEC to establish its jurisdiction to review the ICO for possible violations of U.S. securities laws.
The publication’s sources noted that the investigation would not necessarily lead to any lawsuits and could last for months.
Binance said it “does not believe it is appropriate to comment on ongoing communication with regulators, which includes education, assistance and voluntary responses to requests for information.”
The commission is separately examining Binance’s U.S. operations regarding insider trading and the activity of market makers associated with the exchange’s founder, Changpei Zhao.
“Binance.US is a separate U.S.-focused trading platform that serves local users by offering products and services that comply with U.S. federal and state regulations,” the company said.